It was predictable that the week would start on a quiet note given the US holiday and a blanket of snow across London.

Traders reported light flows and spreads drifted moderately tighter in the low volumes. The Markit iTraxx Europe was trading around 102.5bps, just under 1.5bps tighter than Friday's close.

The overall tone remains positive, helped by a solid start to US earnings season. Morgan Stanley and General Electric on Friday were the latest blue-chip firms to beat estimates. Several other bellwether names, such as Apple, Google and Microsoft, report this week and the results will have an important bearing on sentiment.

In Europe, German cement maker HeidelbergCement provided some welcome news for credit investors. The company's chief executive, Bernd Scheifele, said debt reduction will be the main priority this year and significant divided hikes are not on the horizon.

HeidelbergCement's debt stood at €7.8 billion at the end of 2011, a big improvement from almost €15 billion in 2007. Scheifele's objective is to get this figure to €6.5 billion, and he said he expects the net debt/EBITDA ratio to be below three at the end of 2012.

The company's spreads were steady at 237bps following the news. It is a solid BB credit and also trades with an implied rating of BB, according to Markit data. Scheifele's comments today should help the company's cause, at least from a credit perspective.

European markets will probably take their lead from the US tomorrow, with both Google and Texas Instruments reporting earnings. However, events in Japan will also be closely watched. The Bank of Japan is widely expected to announce an expansion of its balance sheet - in other words, buying bonds - and an increase in its inflation target.

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